Intel Corporation’s (INTC) stock price surged by over 24% to $30.97 intraday on Thursday after Nvidia revealed a $5 billion investment and a joint AI initiative.
This strategic partnership centers around developing custom CPUs and AI hardware, with Intel manufacturing chips for Nvidia’s advanced platforms. The announcement boosted INTEL stock sharply, signaling a potential turnaround for the company amid recent struggles.
Nvidia confirmed it will invest $5 billion in Intel’s common stock, acquiring shares at $23.28 pending regulatory approval. This stake would represent nearly 4% of Intel’s total equity and further strengthen its technology ties. The move brings total recent external investment in Intel to $16 billion.
Intel previously secured $9 billion from the US government and $2 billion from SoftBank earlier this year. This latest Nvidia deal signals renewed market confidence in Intel’s long-term value and shifts Intel closer to the center of global AI hardware development.
Intel will now manufacture x86 CPUs for Nvidia to integrate into AI servers powering data centers. However, this deal excludes Intel’s underperforming foundry business, which continues to struggle. By leveraging its CPU strength, Intel pivots to collaboration rather than direct competition in AI chip design.
Intel will build CPUs with its x86 architecture, tailored for Nvidia’s AI infrastructure platforms. These CPUs will be used in hyperscale and enterprise data centers to support high-demand workloads. In return, Nvidia will embed its GPU chiplets into Intel-designed system-on-chips (SOCs) for personal computing.
This collaboration expands both companies’ influence across consumer and enterprise markets. INTEL stock surged as the market reacted to the immediate benefits of this partnership. The companies aim to combine Intel’s processing power with Nvidia’s accelerated computing to enhance system performance.
Intel will integrate Nvidia’s NVLink technology to connect Intel CPUs with Nvidia GPUs. This fusion supports seamless platform development and offers optimized performance for AI workloads.
Intel’s core manufacturing division remains under pressure with limited customer traction. Due to financial constraints, the company recently announced layoffs and halted its European expansion plan. The Nvidia deal provides a new growth path through product collaboration instead of reliance on manufacturing.
Intel CEO Lip-Bu Tan took charge earlier this year amid operational cutbacks and restructuring. The company now seeks to maximize its dominant CPU presence by forming strategic alliances. Nvidia’s involvement validates Intel’s role in future AI development.
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